Daniel J. Stermer, Corporate Monitor
NATIONAL SENIOR INSURANCE, INC. D/B/A SEEMAN HOLTZ MONITORSHIP
IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT
IN AND FOR PALM BEACH COUNTY, FLORIDA | CIVIL DIVISION
CASE NO.: 50-2021-CA-008718-XXXX-MB/HON. BRADLEY HARPER
1. Do I as an investor need a lawyer to understand what your report actually means?
Neither the Corporate Monitor nor his counsel are able to give legal advice to any individuals affected by the Monitorship. The Initial Report explains the status of the Consenting Corporate Defendants and satisfies the Court’s mandate to the Corporate Monitor to provide an initial report. The Initial Report does not make conclusions, as further investigation remains required and remains ongoing and will continue.
2. Is there now or will there be money in the future to repay investors?
As noted in the Court’s Order “Plaintiff has requested a corporate monitor to, among other things, confirm what assets the Consenting Corporate Defendants previously had and currently have; confirm what the Consenting Corporate Defendants’ investors are currently owed; take and maintain care, possession and control over whatever rights, title, or interest the Consenting Corporate Defendants have in said assets to ensure the Consenting Corporate Defendants’ investors are repaid; marshal, safeguard, and liquidate assets; ensure that preferential payments to investors do not occur at the expense of other investors; ensure that the Consenting Corporate Defendants’ investors are repaid in a fair and equitable manner; and evaluate and file ancillary actions to recover monies or assets for the benefit of the Corporate Defendants’ investors.” Order at 3-4, ¶3.
The Court therefore instructed Mr. Stermer to, among other things:
“To determine the nature, location and value of all property interests of the Consenting Corporate Defendants, including, but not limited to, life settlement insurance policies, monies, funds, securities, cryptocurrencies, credits, effects, goods, chattels, lands, premises, leases, claims, rights and other assets, together with all rents, profits, dividends, interest or other income attributable thereto, of whatever kind, which the Consenting Corporate Defendants own, possess, have a beneficial interest in, or control directly or indirectly;”
“To propose to this Court a claims process for the determination of amounts owed to investors and other creditors, the determination of priorities among such claims, and a distribution plan for the return of funds;”
“To disburse funds to investors only upon further Order of this Court.”
With these mandates in mind, the Corporate Monitor’s Initial Report explains the challenges he has encountered in determining the value of the assets he now controls, as many are subject to liabilities, claims, and ongoing expenses to maintain and preserve their value.
Because the value of the assets of the Consenting Corporate Defendants is not determined, the Corporate Monitor is not currently able to present a claims process or distribution plan to repay investors any amounts.
Currently, cash on hand for any of the Consenting Corporate Defendants is very limited. The Corporate Monitor is actively working to determine a plan to create liquidity from the Consenting Corporate Defendants’ assets to achieve a distribution plan that is fair and equitable, subject to Court approval. The Corporate Monitor cannot project when any such potential plan to create liquidity will occur nor can the Corporate Monitor project the extend of such potential plan.
3. I’m also hearing that the asset values exceed the liabilities however in your original report this doesn’t seem to be the case. Can you confirm the estimated worth of the assets vs the liabilities?
The value of the assets and liabilities of each of the Consenting Corporate Defendants is under investigation.
4. I am concerned by the competing, duplicative efforts to recover monies. There are class action law suits, the Florida OFR, and the Monitorship working separately towards the same goal.
The purpose of the Monitorship is distinct from the litigation matters against the Consenting Corporate Defendants and the other defendants named in the case. The Corporate Monitor continues to work collaboratively with all constituents, including counsel for the class action plaintiffs and counsel for the OFR. Recently, in a cooperation with the Corporate Monitor, counsel for the class action plaintiffs dismissed without prejudice the Consenting Corporate Defendants from the class action pending in the Southern District of Florida. Similarly, the Corporate Monitor serves the Court and remains neutral with respect to the OFR’s claims against the Consenting Corporate Defendants and the other parties in the OFR Action.
5. Will members of the class action suits jump to the front of the line?
The Corporate Monitor has no control over the administration of the proposed class action or any funds that may be made available to investors who are members of the proposed class. At this time, the claims made by the class action plaintiffs have not been adjudicated nor has a judgment been entered in the case. As stated in response to Question 4 above, recently, in a cooperation with the Corporate Monitor, counsel for the class action plaintiffs dismissed without prejudice the Consenting Corporate Defendants from the class action pending in the Southern District of Florida so that all claims against the Consenting Corporate Defendants will be administer in the OFR Action. Pursuant to the Court’s Order, the Corporate Monitor may implement a claims process, but it is still too early to determine what the process will look like and how claims will be treated, but the Corporate Monitor anticipates that if/when a claims process is approved by the Court that such a process would contemplate treating all similarly situated claims in the same manner.
6. Same question for investors who signed onto the OFR civil complaint?
The Corporate Monitor is unaware of a claims administration process that is distinct from the prospective claims administration process that the Court instructed the Corporate Monitor to administer upon further order of the Court (as discussed above). At this time, the claims made by the OFR have not been adjudicated nor has a judgment been entered in the case. Noteholders may have completed a questionnaire and provided same to OFR but those are separate and distinct from the OFR Action.
7. Could awards to the class action suits diminish the available monies for the Monitorship Estate?
At this time, the Consenting Corporate Defendants under the Corporate Monitor’s control are not parties to the class action lawsuit and, as stated in Questions 4 and 5 above, counsel for the class action plaintiffs, in cooperation with the Corporate Monitor, dismissed without prejudice the Consenting Corporate Defendants from the class action pending in the Southern District of Florida . Similarly, the Corporate Monitor has not initiated litigation against any of the defendants to the class action lawsuit at this time.
8. Who if anyone has priority in situations like this, which I assume is not unique?
The Corporate Monitor believes the Court will determine priority of rights in interest to any funds recovered by the Corporate Monitor and will instruct the Corporate Monitor on the distribution of such funds.
9. Will these competing efforts be synergistic or antagonistic?
The Corporate Monitor is not antagonistic to the defendants in the OFR action, the OFR, or the class plaintiffs. The Corporate Monitor is a neutral who serves the Court. The Corporate Monitor’s role is distinct from that of a party in the lawsuits.
10. Is this a race to a limited pot of gold between these three entities?
No. The Corporate Monitor is tasked with recovering and preserving assets of the Consenting Corporate Defendants. Thus, his obligations are distinct from the litigants, who seek determinations of liability and damages from the alleged unlawful acts subject of the lawsuits.
11. What is taking so long to get money owed?
The process of identifying, valuing, and administering assets and liabilities is complex and time intensive. At this point, given that the life insurance policies owned by one or more of the Consenting Corporate Defendants have not matured, they are not liquid nor immediately convertible to cash to repay the promissory notes issued by the investors.
12. Why was unpaid interest due to the investors not mentioned in the report when interest and fees were mentioned in the monies owed to other parties, creditors?
The Corporate Monitor’s Initial Report included the costs of capital used to fund the current and past operations of the Consenting Corporate Defendants, including the current line of credit from which the premiums of the life insurance policies owned or controlled by one or more of the Consenting Corporate Defendants are paid. At such time as the Court authorizes the Corporate Monitor to establish a claims process, investors may identify the amount of unpaid interest and remaining principal related to the respective notes and investor agreements to which they are a party. The Corporate Monitor and his professionals are analyzing each Noteholder account to determine capital contributions received from Noteholders, interest on each Note, and payments made to Noteholders, whether return of capital or interest, in order to arrive at each Noteholder’s current balance on their respective Note(s).
13. I did not address you getting paid as I am well aware that you deserve to and should get paid.
The Corporate Monitor and his professionals will be paid first, as administrative expenses of the Monitorship, per the Court’s Order. The Corporate Monitor will seek a further order from the Court authorizing him to pay himself and his professionals from funds recovered or otherwise brough under his control as Corporate Monitor. The Corporate Monitor and each of the professionals he has hired have agreed to provide a discount from their standard rates and fees.
14. I was interested in who will get paid and in what order, if in fact there are any assets to be liquidated, will the payments be made to the noteholders before the other entities? I am not part of a “class action” represented by an attorney so will they get any preferential treatment or priority?
At this time, the Consenting Corporate Defendants under the Corporate Monitor’s control are not defendants in the class action lawsuit.
Further as state in the Order appointing the Corporate Monitor, he was ordered “[t]o propose to this Court a claims process for the determination of amounts owed to investors and other creditors, the determination of priorities among such claims, and a distribution plan for the return of funds.” At this time, no proposal has been made to the Court nor has the Court entered any order determining the priority of payments.
15. You did not answer my questions regarding criminal charges or my contacting the Attorney General’s office regarding criminal charges in my state?
The Corporate Monitor cannot provide legal advice and, as a Court-appointed neutral, does not express any opinion matters outside the scope of the Order appointing him. While we will continue to answer questions about the Monitorship and do our best to be responsive, we urge you to obtain any individual legal or tax advice for questions related to your specific situation.
16. What is a Corporate Monitor?
A Corporate Monitor is a Court appointed fiduciary appointed to perform certain tasks and then to provide reports to the Court and to the Parties. A Corporate Monitor’s role is typically to supervise rather than to directly manage, to make reports and recommendations and to otherwise comply with the Order of appointment.
17. Who employs the Corporate Monitor?
The Corporate Monitor is an agent of and reports to the Court.
18. What authority does the Corporate Monitor have?
The Corporate Monitor’s duties and authority are set forth in the Court’s September14, 2021 Agreed Order Granting Plaintiff’s Consent Motion for Appointment of Corporate Monitor and Related Injunctive Relief, which may be modified further by future Order(s) of the Court. The Court’s September 14, 2021 Agreed Order available through the following link
19. What will happen to the Corporate Defendants who are subject to the Corporate Monitorship?
It is too soon to determine what will happen to the Consenting Corporate Defendants Entities. The Corporate Monitor is currently exploring various possibilities with respect to the continued operations of the Consenting Corporate Defendants and has engaged a consultant, Development Specialists, Inc., who is assisting the Corporate Monitor to: (a) review and analyze the financial records of the Consenting Corporate Defendants; (b) conduct financial analysis and forensic accounting services; and (c) assess the ongoing operations of the Consenting Corporate Defendants and provide input and guidance regarding the management and oversight of the day-to-day operations of the Consenting Corporate Defendants. At the appropriate time, the Corporate Monitor will submit his report and recommendations regarding ongoing operations to the Court. Ultimately, the Court will be responsible for considering and approving any proposed recommendations or plan put forth by the Corporate Monitor.
20. How much of my investment will I receive?
It is too soon to determine how much noteholders will receive from the Consenting Corporate Defendants. The Corporate Monitor and his professionals are working to understand and to preserve and protect the assets of the Consenting Corporate Defendants, but there is no way to predict at this early date how much will be returned to each noteholder or when that will occur.
21. Will further legal action be taken against the Consenting Corporate Defendants?
At this stage it us too early to know of any additional legal action against the Consenting Corporate Defendants.
22. Should I send copies of my documents providing that am a noteholder to the Corporate Monitor?
Not at this time
23. Will I be able to review the Complaint, Agreed Consent Order, and other filings in the proceeding?
Yes, these and other filings in the proceeding will be available on this site under the Court Documents button
24. Is the Corporate Monitor my lawyer?
No. The Corporate Monitor is an agent of the Court and is effectuating the Court’s orders The Corporate Monitor will, however, be investigating potential claims or methods of recovery that he can pursue for the benefit of the noteholders of the Consenting Corporate Defendants.
25. Should I hire a lawyer?
Although the Corporate Monitor cannot provide you with legal advice, you certainly have the right to consult or hire with your own lawyer. As authorized by the Court, however, the Corporate Monitor will be investigating all potential claims or methods of recovery that can be pursued for the benefit of the noteholder and other parties in interest in the Consenting Corporate Defendants. We do urge you to consult with your independent counsel regarding your rights in this matter.
26. How long will this process take?
At this very early stage of the proceedings, we cannot predict how long it will take to complete this process
27. How can I stay informed of progress in this case?
The Corporate Monitor will post new information on this website from time to time, including Court Documents, Corporate Monitor Reports, and other pertinent information.
28. If I have other questions, how can I get them answered?
Contact information for the Corporate Monitor is available through the following link